Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - & author of Things That Make You Go of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Wednesday, 16 April 2014

Vacancy rates tighten further

SQM Research released its vacancy rates data for the month of March 2014 here, which showed national vacancy rates coming in from 2.1% to 2.0%, a moderate fall being considered normal for the time of year.

The main point of note in the month was the fall in Melbourne's vacancy rate to 2.1% (click chart)

Darwin's property market remains wretchedly tight with a vacancy rate of just 1.2%.

I mentioned in passing the other day how during Sydney's last property boom through to 2003/4, vacancy rates as recorded by the REIA ran as high as 4.3%, and 5.3% in the outer suburbs, leading many to fear a crash.

Given that it was traditionally said that a "market in equilibrium" has a vacancy rate of 3.0%, the above chart goes some way to explaining why dwelling prices in Sydney will be higher next year than they were last year.

Not only is the city-wide vacancy rate at 1.5% very tight, certain key suburbs such as some in the inner west have vacancy rates as low as 0.6%-0.8%, which is essentially as low as you are ever going to see due in a frictional data set.

The ABS regional population growth figures reported this month showed that Sydney's population accelerated into a stunning growth of nearly 80,000 persons in the year to June 2013 (Greater Sydney was 81,000), easily enough to absorb the new dwelling stock (click chart).

A few commentators went on to make themselves famous with some outrageous crash predictions some years ago, but based upon the evidence below, it's hard to believe they can possibly have troubled themselves to look at any actual supply or demand data.

Sydney's population growth is so high that the city urgently needs the increase in dwelling approvals to be converted into new dwellings in order to keep up.

Source: RP Data

Tomorrow, we'll take a look at the dwelling commencements data.

It slipped under the radar today since people were largely too busy concerning themselves with other data (from China mostly), but as I will demonstrate Australia's residential construction boom is now underway.

However, as I will also highlight, we're undergoing a significant structural shift - the new home building boom will be very heavily focused on attached dwellings and apartments, not houses.